U.S. markets are set to open slightly lower to start the day after selling pressure came into markets on Wednesday. Global markets were mixed after a report that a trade deal could be done by May 10th. First quarter productivity for the U.S. increased at its fastest pace in more than four years at 3.6% increase for the quarter.
The S&P 500 came under pressure on Wednesday and sold off down to the 10-day moving average at 2925.30. The selling came with better than average volume which also caused the RSI index to move below the 70 line. A move below the 70 level is typically a short term sell signal, and we will remain short term cautious going forward. The index now has potential resistance at 2954.13, and potential support near the 20-day moving average at 2908.46.
The FOMC held the line on Wednesday and did not lower rates as President Trump suggested. The committee made it clear that no action on interest rates was on the horizon. Chairman Powell said the recent relapse in inflation rates was likely temporary, so it appears the Fed will be on the sidelines for foreseeable future.
We are currently long term bullish with short term caution.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum Oscillator that measures the speed and changes of price movements.
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